Putting Your Affairs In Order

It’s important to have your financial affairs in order, especially whe5cf7e-grandparentsn approaching an advanced age, but it’s all so overwhelming. How can you go about this task?

No one knows when their time will come. Whether you’re pushing late into your 70s or are a spring chicken, it’s best to be prepared. Also, a debilitating illness or car accident can incapacitate anyone without warning, leaving a person unable to manage their finances or express their needs. Establishing a clear protocol for the distribution of assets and for medical preferences will ease a painful time for family members while ensuring that your will is carried out.

Fortunately, this is not as overwhelming as it sounds. Here are nine steps you can take to make sure you’re fully prepared for any eventuality:

1.) Take inventory of all your items of value

List every item you own that’s worth $100 or more. First, list all physical items like your TV set, jewelry collection, vehicles, guns and computers. Next, list all non-physical assets, including 401k plans, IRA assets, and all existing insurance policies, such as homeowners, auto and health insurance.

Be sure to list all open accounts in your name with Destinations Credit Union and any other financial institution. While completing this step, check that all beneficiaries listed on these accounts are the ones you want and that all other information is correct.

2.) Assemble a list of all your credit cards & debts

Create a list of your open credit cards and other debts. Include auto loans, existing mortgages, home equity lines of credit, student loans and any other debts you may have. It’s a good idea to run a free credit report once a year; this will remind you about any open credit cards you may have forgotten.

3.) Select an estate administrator

Choose someone you trust completely to be responsible for executing your will. Think carefully before choosing your administrator and bear in mind that emotions accompanying your death may impair this person’s decision-making ability.

4.) Send a copy of your assets list to your estate administrator

When you’ve completed your lists, date and sign them. Make at least three copies of each list; give the original to your estate administrator and, if you’re married, give another copy to your spouse. Have your spouse place the list in a safe-deposit box and keep another copy in a safe place at home.

5.) Review all retirement accounts, life insurance policies and annuities

Every account in which you list beneficiaries will be bequeathed to the person(s) or entity designated on the actual account upon your death, regardless of how you list these accounts in your will. Take the time now to review all such accounts, policies and annuities to be sure they list your chosen beneficiaries.

6.) Assign TOD designations

Prevent your assets from being distributed in an expensive court process by simply assigning them a TOD, or transfer-on-death, beneficiary. Most accounts can easily be set up with a TOD. Call, click or stop by [credit union] to find out how you can set up a TOD beneficiary on your accounts.

7.) Create a will

Wills are not just for senior citizens – everyone over the age of 18 should have one. This document will serve as the guide for the distribution of your assets upon your death, preventing thorny family feuds and expensive court proceedings.

While creating your will, be sure to assign power of attorney to a designated lawyer, choose a health-care surrogate and select guardians for your kids and pets.

Sign and date your will, have two witnesses sign it, and obtain a notarization on the final draft. Give one copy to your designated estate administrator, keep another copy in a safe place at home and give your spouse a third copy to be kept in a safe-deposit box.

8.) Create a living will

You may be strong and healthy now, but there’s no guarantee you’ll always be that way. A debilitating disease or a car accident can incapacitate you, leaving you unable to care for yourself or to express your needs. At that point, having a living will, or a medical power of attorney, will be a true life-saver. This document will stipulate who you’ve chosen for the responsibility of making medical decisions on your behalf. It will also specify whether you’d like to be resuscitated, put on life support and have other invasive procedures done on your behalf. Having a living will takes a tremendous burden off your family during an already trying time.

9.) Create an estate-information packet

Now that you’ve gathered all your financial information and created your wills, it’s time to organize them. While you may know where all important documents are kept, it can be difficult for someone else to locate them when circumstances make it necessary. By creating one master document containing all important information, you’ll save your loved ones hours of work.

Your estate-information packet should include details like your Social Security number, the location of your living will, your designated estate administrator, a list of all accounts you own and a list of your investments.

This link will provide you with a checklist that can serve as your guide or template when creating your estate-information packet: http://drotterholt.com/affairs.html
Now that you’ve taken care of the hard work, you can get back to your bucket list of things to do before you die. Do you want to swim with dolphins? Visit the Alps? Go for it — the sky’s the limit!

Your Turn: Thinking about what happens after you’re gone is never easy. How did you motivate yourself to take care of this task?

SOURCES:

https://www.nia.gov/health/publication/getting-your-affairs-order

https://drotterholt.com/affairs.html

http://www.investopedia.com/articles/retirement/10/estate-planning-checklist.asp

http://www.investopedia.com/financial-edge/0709/3-things-to-get-in-order-before-you-die.aspx

http://www.webmd.com/healthy-aging/features/putting-affairs-in-order-before-death#1

Going From New Homeowner To Happy Home: Tips For Recent Homebuyers


Buying your first home is a major milestone. There’s nothing quite like the giddy
rush that comes from knowing you could paint a wall fluorescent pink or cover the cabinets in peanut butter and no one could legally stop you. You’ve also got a new and quite big investment you need to maintain. Weighing the freedom against the responsibility is a delicate balancing act, and doing it successfully is part of what being a homeowner is all about

 

There are a number of upcoming firsts for new homebuyers. Since you’ve just come up with a down payment, you might think your biggest hurdle of financial responsibility is over. However, that’s not the case. Check out these common homeowner situations to help you best prepare for them.
1.) Something major breaks
As a renter, if the refrigerator stopped running, you only had to concern yourself with keeping your food cold until the landlord fixed it or bought a new one. Also as a renter, major plumbing problems in your building can be a hassle, but easily survivable. The first time something major, like an appliance, structural element, or major system breaks in your home, you can be in for a staggering amount of work and stress.
If you’re counting on homeowner’s insurance or a home warranty to cover you, check your policies carefully. Most home warranties end at the walls of your house, and insurance won’t cover damage outside of a disaster. Everyone you might turn to for assistance will be looking for reasons not to help you. If you need to do significant work on your home, like a large-scale plumbing repair, you’ll probably have to pay for it yourself.
Events like these will happen sooner or later. The only way to be prepared is to practice self-insurance. Start building a home repair and renovation fund, and build major expenses into your regular monthly budget. When you spread these expenses out over the course of months, rather than trying to pay for them all at once, they’ll be much more manageable. As a guideline, expect to spend 1-4% of the value of your home in repairs and maintenance every year.
2.) Costs increase
When considering a budget in your new location, it’s tempting to just move the money you were spending on rent into a mortgage payment. However, your housing costs aren’t the only thing that’s likely to go up. If you’re moving from a smaller apartment into a larger house, utility costs will increase. If you’re going from a relatively new apartment building into an older house, appliances won’t run as efficiently, and seals around doors and windows won’t fit as snugly.
It’s not just utilities, of course. Transportation costs may also increase if you’ve moved further away from work or other places you frequent. Having a larger kitchen might encourage you to cook and entertain more, putting pressure on the grocery budget but saving on your restaurant spending. Lawn maintenance and landscaping costs may make an appearance on your budget for the first time. A lot of costs will go up as you transition to a new lifestyle.
Spend your first month in your new locale documenting your expenses. This is the best way to build expectations for what your new living expenses might look like. If, after a month, your expenses are too high, you’ll have a better idea about where you can make cuts.
3.) Tax bills come due
Property taxes are a once or twice a year expense that can really wreak havoc on your budget. While many mortgage companies maintain an escrow account for these costs and include them in your regular mortgage payment, many homeowners are on their own when it comes to tax time. If that’s the case for you, start doing research to determine what your tax bill might look like.
This is another expense that gets manageable if you break it into a monthly cost. The US average property tax bill is just under $3,000. That’s about $250 per month. That might be a challenge to set aside, but it’s still better than being blindsided with the full amount.
4.) Maintenance requirements increase
There are dozens of things around the house that most people don’t think twice about. Items like water supply hoses, smoke alarms and toilet bowl seals all decay with time. Many of these things can cause damage to your house if it doesn’t work properly.
Start making a list of chores that need to be done monthly, weekly or less frequently. Split up those duties to make sure no one has to do it all by themselves. Keep a spreadsheet or some other document so you know the last time maintenance was performed on major items in your home. Remember, an ounce of prevention is worth a pound of cure. Fix little problems before they turn into big ones!
YOUR TURN: What do you wish someone had told you before you bought your first home? Let us know in the comments!

https://www.texasrealestate.com/advice-for-consumers/article/10-maintenance-tips-for-first-time-homeowners

Common Mistakes During Open Enrollment


Fall is a time of many changes. The temperatures cool, the leaves change color, and the world starts getting ready for winter. With all that change, there’s one thing people often leave the same: their workplace benefits packages.

November is the beginning of the open enrollment period for many workplace benefit plans. It’s also the open enrollment period for insurance policies on the Obamacare marketplace. This makes it an excellent time to review your insurance information and other benefits.  Destinations Credit Union has a partnership with TruStage Insurance which offers members good pricing on plans through the marketplace.  Watch our website for details.

These perks may have been a big part of what drew you to your job in the first place, so it makes sense to get as much out of them as possible. You may be paying too much (or too little!) for health insurance, and now’s your chance to fix it. Be sure to watch out for these three common pitfalls when enrolling in workplace benefits.

1.) The passive opt-in

When starting a new job, it’s easy to be overwhelmed by the barrage of paperwork and decisions. Health insurance decisions are just one of the dozen new responsibilities, so they get a fraction of the attention they deserve. For many people, though, those are the health insurance choices they stay with for much of their careers.

There are two key reasons why sticking with the default option may be a poor choice. First, your life situation has likely changed. As you get older, your need for more comprehensive health coverage increases. You may also need more extensive dependent coverage or you may have more disposable income to contribute to an HSA or FSA.

Second, your employer’s offerings may have changed. Most companies renegotiate their insurance rates annually, and may have negotiated for greater flexibility, lower premiums or better coverage. These are only options you’ll discover if you sit down with your HR representative and figure out your coverage for the next benefits year.

2.) Forgetting spousal benefits

Doubling preventative solutions is rarely a bad thing. Having a belt and suspenders seems like the most cautious way to keep your pants up. However, when it comes to health insurance, being covered by both your and your spouse’s plans can be a serious financial hazard.

First, you may be paying more than necessary. Adding a spouse to a workplace policy is usually cheaper than paying for two separate policies. Take a look at both policies and see which one provides the right combination of better prices and better coverage.

More dangerously, double insurance can frequently leave you in the middle of a fight between insurance companies. Both will insist that the other should pay first, and you could wind up buried under a mountain of paperwork for coordination of benefits. This trouble can compound when there are children covered under multiple policies. While you’ll never be on the hook for the whole charge, you may have to work twice as hard to get covered.

If you and your spouse are on different enrollment periods, most companies will provide a preview of the planned benefits offerings outside open enrollment. This allows you and your partner to review and consider the available options. Picking one insurance plan for both of you can really cut down your costs.

3.) Ignoring HSA/FSA options

Enrolling in a Health Savings Account (HSA) or Flexible Spending Account (FSA) can sting at first. Seeing dollars go out of your paycheck before you spend them hurts. Don’t let that deter you, though.

HSAs and FSAs are similar in function, but there are important differences. Both allow you to contribute pre-tax dollars that you can use for health care-related expenses. The difference is that HSAs rollover their entire remaining balance to the next year, while FSAs only rollover up to a certain limit established by your plan. There are other differences, like whether or not the account follows you after you leave the company, but the principle difference is the rollover effect.

Enrolling in one of these accounts requires estimating your healthcare costs for the next year. For most people, the safest assumption is that you’ll spend the same amount next year as you did last year. However, if you’ve got a planned medical expense, such as a pregnancy, surgery or other major issue that will arise next year, you can get an estimate to guide your contributions.

Funding an HSA or an FSA is basically free money off your taxes. One way or another, you’ll have to pay for health care costs. By designating money for it early, you can avoid paying taxes on money you’ll spend for health care.

No matter how long you’ve held your current position, it’s worth revisiting your benefits options once a year. Don’t just throw away the paperwork about your insurance, and don’t skip the informational policy meetings. Be an active participant in your benefits decisions. After all, you’ve earned them.

YOUR TURN: Insurance questions are difficult. What matters most to you when picking an insurance policy? Help your fellow benefit strugglers in the comments with your best advice!

SOURCES:


Is 2015 The Year Of The Health Care Hack?

Brought to you by Destinations Credit Union

If 2014 was the year of major retailers being involved in security breaches, 2015 has thus far been the year for insurance companies. Anthem led the way earlier this year with a hack that compromised the personal information of hundreds of thousands of victims. Now, Premera Blue Cross, one of the largest health insurance providers in the Pacific Northwest, has been the target of a security breach.

Security experts are still attempting to discover the full extent of the breach. Hackers evidently accessed housing data from as far back as 2002. It is believed that at least 11 million people were affected by the breach.

Premera also has dozens of subsidiary organizations, clients, and contractors each with its own set of records. Technology experts from the health care provider are working tirelessly to determine the extent of their information that was compromised. Vivacity, a workplace wellness provider, and Connexion Insurance Solutions, which focuses on small- to medium- sized businesses, were both affected, too.

The vulnerability has been in use for some time. Company officials say the first breach occurred in May of 2014 and was only discovered in January of 2015. The FBI, in coordination with private cyber security firm Mandiant, is working to uncover the size and severity of this attack as well as to find the perpetrators.

Criminals have stolen a wide variety of personal information from the provider. Names, addresses, and Social Security numbers are the obvious targets, and these are frequently used to commit identity theft or cloning. A surprising amount of health information is also used to illegally obtain prescription medication or commit insurance fraud. This form of medical identity theft is growing as a black market solution to higher medical costs. In 2014, 2.3 million people were victims of this kind of fraud and each victim had to pay an average of $13,500 to resolve the problem.

There appears to be a strong connection between the attacks made on Premera and those made on Anthem. In both cases, hackers registered domains with common misspellings of the company’s name and used those sites to collect login information. These usernames and passwords were then used to breach the company at higher and higher levels. These tactics, and several others, point to Chinese hacking group Deep Panda.

As these groups grow bolder, it’s more important than ever to keep up with your own best practices in medical identity theft prevention. The FTC recommends following these three steps to keep yourself safe:

1.) Watch your medical records

Medical identity theft results in bills to you for procedures done to someone else. Unscrupulous doctors bill insurance companies for procedures they never did or for more costly versions of operations than what they performed. They count on instant reimbursement, knowing the insurance company will try to collect the fraudulent charge from the policyholder. Medical identity theft confounds this process. In other instances, criminals use your identity to get medical treatment and bill it to your insurance, leaving you on the hook for the charges.

These charges will show up in a few places. For instance, you may get a call from a collection agency over a medical bill. You may also have a medical bill arrive in the mail for a procedure you didn’t have. Your insurance company may also notify you of a change in your premium or coverage based on a new medical condition. Each of these is a red flag that you’ve been the victim of medical identity theft.

2.) Review your records

The Health Insurance Privacy Protection Act (HIPPA) requires that healthcare companies keep and maintain detailed records about patient services. You have the right to obtain a copy of those records. In most cases, your best bet will be to contact a major provider of medical services, like a national pharmacy.

You may also need to contact your insurance provider for copies of their records. They have the same record-keeping and disclosure requirements that providers do, but they may charge for the service of providing records. If you can narrow down a window of time during which you suspect your account was compromised, you can save yourself both time and money.

Providers may refuse to comply with your request for disclosure because they fear violating the privacy of the identity thief. Fortunately, an appeals process exists for this decision. You need to contact the person named in the privacy policy as the patient representative or ombudsman. If you are still unsuccessful, you can contact the US Department of Health and Human Services’ Office for Civil Rights.

3.) Get corrections to your records

You can submit requests for corrections to each provider that has charged you for services. Such a request should explain the reason for the error and include documentation that the charge is, in fact, an error. Examples would be proof that you were nowhere near the provider at the time of the charge or a letter from your doctor stating that you have never experienced the condition that was treated.

If your provider refuses to change or reverse the charge, ask them to place a notice of dispute on your account. This notice will show credit agencies that the charge may not reflect your borrowing habits and will help you mitigate the impact of a poor credit score. Such a notice should also stop the collection calls.

This pattern of security leaks means everyone is potentially at risk. You can’t avoid digitizing your health care information. But you can take steps to keep your identity safe. Credit monitoring services can provide you with peace of mind. Knowing you’ve got a team of dedicated professionals watching your back around the clock can help you sleep soundly at night.

SOURCES:

Q & A: Anthem’s Data Breach And What You Need To Know



Q: I keep hearing about Anthem being a hacking target. What happened and am I at risk?

A: Anthem Inc., the second-largest health insurer in America, was targeted in a major security breach over the last month. New reports suggest hackers have been trying to compromise the company’s systems for months and may have been inside their system since December. According to the company, 80 million Anthem customers may have had their names, Social Security numbers and addresses compromised.

This is a unique event in the recent history of cybersecurity. Previous hacks, like those affecting Home Depot or Target, were attacking hardware. Hackers were exploiting vulnerabilities in computer hardware and software to gain access to confidential data. Here, the company is reporting that hackers had a different target: company employees.

Anthem reports that, beginning in December, hackers acquired login credentials of five employees. The employees could have been victimized by malware or social engineering scams. The hackers trying to beat Anthem didn’t need to find a flaw in the computer infrastructure. Instead, they just had to find a weakness in the people operating those systems.

Once they had these credentials, hackers used their access to do two things. First, they breached the company databases. Once inside, they exposed addresses, dates of birth, employment history, employment information, income data, medical ID’s, names and Social Security numbers. Particularly noteworthy is the fact that payment information was not compromised. That means there’s no need to cancel credit cards that were used to pay Anthem bills yet. Second, hackers created a number of phony email accounts with Anthem domains.

There are two ways victims might be affected by this scam. First, they might have their personal information stolen. This group exclusively consists of current and former Anthem customers. Given the timing of the hack, this will likely result in a fraudulent tax returns and possibly other instances of identity theft.
The second wave of victims is only just now emerging. The fake email accounts have been used to send wave after wave of “phishing” attacks to Anthem customers. These attacks take the form of an email apology with an offer for a year of free credit monitoring. Recipients of the email are redirected to another website to enter their Social Security number and other personally identifying information. This information is then used to commit any of a smorgasboard of identity theft crimes.

Anthem is currently being sued in several states. One lawsuit alleges current and former Anthem subscribers were misled about the security of their personal information and is seeking unspecified damages from the provider in overpaid premiums. Another pending lawsuit is seeking damages resulting from the frauds themselves. Until these lawsuits are settled, Anthem will likely not make any public statement of responsibility or apology, as this could be viewed by the courts as an admission of guilt. At this time, Anthem is offering no free credit monitoring service nor has it made any statement to members outside the press.

If you’re an Anthem subscriber, there are a few steps you should take as soon as possible. To find out if you’re an Anthem subscriber, check your insurance card. If you’re part of a group plan at work, you may need to ask your HR representative if your plan is administered through Anthem. In the meantime, take these three steps.

1.) File your taxes.

This will be one way to check if your Social Security number has been compromised. The state of Connecticut is encouraging their citizens to file early if they’re Anthem customers so hackers using stolen Social Security numbers will be easier to detect.

2.) Put a fraud alert on your credit report.

Contact any one of the three major reporting bureaus (Experian, Equifax, or Transunion) and explain your worries. A fraud report on one account will create a fraud report on all three, so there’s no need to duplicate your efforts. This report will notify you if anyone attempts to open an account in your name during the next 90 days. If you’re absolutely sure your number has been compromised, it might be worth putting a freeze on your credit history. This will prevent anyone from checking your credit or from opening up any account in your name, including you. While drastic, this measure is a sure-fire way to keep yourself safe.

3.) Get proactive with government services.

Notify the Social Security Administration and the Internal Revenue Service of the possible fraud to ensure that no one attempts to file a change of address form in your name. The US Postal Service also maintains a similar service. These steps will ensure that you’ll at least get a paper trail if someone makes an attempt to steal your identity.

Anthem is maintaining a toll-free question line.  Customers with concerns or fears should call 877-263-7995.  They have also created a website – www.AthemFacts.com – with up-to-date information about he scope and severity of the breach.  They have made it clear that future contact with customers affected by the breach will be made by mail. 
 
SOURCES:

Early Retirement Costs You Might Have Missed and How to Save for Them

Retiring early is the dream. You get to spend more time with your family and enjoy your hobbies while you’re healthy enough to do so. You can say goodbye to the workaday world and begin your permanent vacation. 

Maybe it’s less of a dream and more of a necessity. Maybe health problems like chronic pain or arthritis, are forcing you to consider giving up your career before age 65. Perhaps your children need you to help with caring for your grandchildren. 

Whatever your reason for retiring early, a new study released on 6/12/14 by Fidelity Investments warns it will cost you in ways you might not expect. According to the study, early retirees can expect to pay an extra $17,000 per year in medical expenses. The reason? Medicare coverage gaps. You give up your employer-provided health insurance when you retire, and Medicare doesn’t kick in until age 65. This means you’re on your own at a time when your health care costs are near their peak. 

Insurance companies charge older policyholders higher premiums, which means a they’ll claim a bigger chunk of your retirement money. As a savvy credit union member, you know the advantages of planning ahead for your golden years. Let’s look at a few ways you can avoid sticker shock at your retirement party: 

  1. Short-term insurance One popular option is to look for an emergency-only or high-deductible insurance plan (HDHP). These plans feature inexpensive monthly premiums, but offer little in the way of coverage. These budget-friendly insurance options are great if private health insurance is too expensive. You can expect to pay for a variety of costs out-of-pocket. Routine, preventative, and non-emergency medical procedures will be your responsibility. A regular checkup will cost at least $75 and the costs can escalate if your doctor orders tests or other procedures. You may also pay full price for prescription drugs. This option is best if you’re retiring just before age 65. You can afford a few months of risk before Medicare coverage starts. However, you’ll still want another savings option to help with massive medical bills. 
  2. Open a savings certificate for major medical expenses You likely use savings certificates (similar to CDs at a bank) to keep an emergency fund on hand. These savings instruments are ideal for building up money in case of a rainy day. You may want to create one specifically for your health care costs. You’ll want to keep this money separate since you’ll have different needs for it. A sudden, unexpected medical bill is different than needing a new car. You’ll likely have a little more time to pay your medical bill. Many hospitals are willing to work around your financial situation. A 6- or 12-month certificate provides the perfect combination of accessibility and growth. Once you turn 65, you can add your remaining funds to your other retirement savings or even use it to finance a vacation! 
  3. Open (and use) a Health Savings Account A Health Savings Account (HSA) is a special tax-advantaged account for your savings that allows you to defer taxation on the money. The idea is that the money you spend on health care costs shouldn’t be taxed. So, you can save money to pay premiums, deductibles, and other healthcare-related expenses. These accounts have been growing in popularity this year. If your family insurance plan has a deductible of $2,500 or more, you can open an HSA. You can contribute up to $6,450 to your HSA per year, tax-free. Many employers also provide matching contributions to HSAs as part of their benefits package. While withdrawals from your HSA are allowed only for medical expenses, this rule is waived for people 65 or older. While non-medical withdrawals are taxed, the money still grows tax-free. Many financial planners are advocating the use of HSAs as a kind of “shadow IRA.” With them, you reduce your current tax burden while saving for retirement. 


Planning for your future health care costs can be scary, but it’ll be much scarier to go into retirement unprepared. Sit down with a representative from your credit union today to discuss how you can save for your health care in retirement. You’ll thank yourself later. 

SOURCES: 
http://www.irs.gov/pub/irs-pdf/p969.pdf http://online.wsj.com/articles/health-savings-accounts-can-double-as-shadow-iras-1401481345
http://www.marketwatch.com/story/fidelity-analysis-reveals-extra-health-care-costs-in-retirement-for-couples-retiring-before-age-65-savings-for-those-who-delay-2014-06-12 
http://www.sentinelsource.com/business/financial_news/hidden-cost-of-early-retirement-medical-bills/article_791fce9c-584c-5245-84c2-0c7746b7523e.html

6 Things to Know Before Applying for Medicare


If your 65th birthday is approaching, it will pay to get to know the Medicare system. Timing is a huge factor in keeping your costs low, and there are other tricks to the trade that will help you navigate the often-confusing rules of Medicare. Did you know that the decisions you make early on in your Medicare eligibility can have a lasting financial impact? Here are six things you need to know-before it’s too late!

1.  It’s a good idea to get help.

Navigating the confusing paperwork that’s involved in Medicare and evaluating health plans can be an overwhelming task. Depending on where you live, there are about 20 different Medicare Advantage plans, upward of 35 drug plans, and a wide variety of supplemental plans, in addition to traditional Medicare. So how do you know what’s right for you? Hiring an independent Medicare advisor will help you find the coverage that will meet your specific needs. For the advisor’s $250 to $1,000 fee, you will have access to an expert who sifts through the different options for you using proprietary software-not guesswork. A simple Internet search will net you multiple advisor options.

2.  If you apply early, you can avoid additional fees.

You can sign up for Medicare three months before you turn 65 through three months after your 65th birthday. However, it is in your best interest to apply early, regardless of whether you need the coverage on your 65th birthday. If you don’t sign up then, you are still eligible for benefits, but you will pay more. For every 12-month period that you are eligible for Medicare but don’t sign up, you will pay an additional 10 percent on your premiums. If you are currently part of a group health plan through an employer, sign up within 8 months of leaving the job to avoid the higher premiums.

3.  You may need a supplemental plan.

Medicare acts as a basic insurance plan, but many retirees have additional out-of-pocket expenses, just like any other health plan. Supplemental coverage with Medicare Advantage or a Medigap plan will help to defer some of that cost. There is a six-month period beginning the month you turn 65 that guarantees your acceptance into a Medigap plan, regardless of any preexisting conditions. After that period expires, your case will be evaluated based on your current health, which may mean denial of coverage or high premiums. So again, it pays to sign up on time.

4.  It pays to revisit plans yearly.

Your needs may change every year, and Medicare’s supplemental plans will also change. You will be automatically renewed under your current plans each year, but it’s a good idea to take a look at what else is out there. Has the premium changed? Is the coverage the same? Do your homework to ensure you receive the coverage you need and at the price you want. This will help you avoid unnecessary surprises when your bill arrives in the mail.

5.  Preventative care is covered.

Yearly physicals and check-ups are just as important now as they were when you were younger. Medicare offers a preventative care visit within your first 12 months in the system. Your doctor will review your medical history and discuss preventative care with you. After your first year with Medicare, you are eligible for yearly wellness visits in addition to other preventative procedures. Ask your adviser or doctor about your coverage.

6. Medicare works with other coverage.

If you are covered under another health plan, Medicare will work with that plan under coordination of benefits rules. Essentially, your primary plan will cover costs up to the limits of the plan, and then your secondary plan will pay the costs that the primary plan did not. It’s important to note that there may still be out-of-pocket expenses, based on your coverage, which is why it’s important to take advantage of supplemental coverage.

Making sure you’re adequately covered by health insurance is a necessary, but often confusing, process. It pays-literally-to do your homework and sign up early to avoid unnecessary price increases that will last the rest of your life. And when you take advantage of Medicare’s preventative coverage, you will save more in the long run in terms of your health, quality of life, and in future health care costs.